Labour urged to support oil and gas sector to enable green transition

Offshore wind projects Credit: PA Wire/PA Images

A Labour government should commit to supporting the UK’s oil and gas industry to aid the UK’s transition to green energy and boost the economy, a leading sector figure has said.

David Whitehouse, chief executive of the 400-member trade association Offshore Energies UK (OEUK), told the PA news agency that fossil fuels will remain crucial as millions of homes will still be reliant on oil and gas by the end of the decade, which is Labour’s “clean power” deadline.

Mr Whitehouse added that a failure to protect domestic production would leave the UK reliant on more expensive and greater-polluting imports, and threaten thousands of jobs, particularly in small communities.

When asked to comment on Labour’s energy policy and what the party should do if it wins the next election, Mr Whitehouse said: “In the debate about homegrown energy transition, we should be promoting our own jobs and our own skills. We should be promoting our own companies.

“We should be creating real value here. We should not be seeking to import energy from elsewhere. We produce it cleaner here than those other areas.

“In a world where there is a genuine cost-of-living crisis, we need economic value in our society, and if the path forward is economic growth then we want policies that recognise that and support all sectors.”

“This will not only support our small communities up and down the country, but actually will be critical to delivering on our climate change ambitions.”

The oil and gas sector is worth £20 billion a year to the UK economy and supports 200,000 jobs, including 90,000 in Scotland, across the supply chain.

Currently the industry provides about half the UK’s fossil fuel needs, with three-quarters of domestic energy dependent on oil and gas.

Labour has said it would scrap investment relief in the windfall tax on North Sea producers and halt new oil and gas licenscs, but will not end any already in place.

Mr Whitehouse said the UK can ill-afford to allow domestic oil and gas production to dwindle as significant demand is expected to last for decades to come.

He added: “By the end of the decade we will still have millions of homes reliant on gas for heating and cooking and if we don’t continue to invest in domestic supplies then will we will be relying on somewhere in the region of at least 80% on imports.

“If you look at the geopolitical world that we are in at the moment, then there will be a real concern the UK will struggle.”

The comments came as a report commissioned by OEUK found the oil and gas sector’s supply chain has between 60 and 80% of the capabilities required to develop the UK’s low carbon energy provision from floating wind power, hydrogen and carbon capture storage.

The report identified an urgent need for “strategic action” to enable supply chain companies to seize a projected 4% annual increase in spending on these new technologies.

Mr Whitehouse said it is important that both renewable energy and fossil fuel supply chains are supported so that different sectors can collaborate to “create a path for a really successful energy transition”.

He added: “There are many areas where the UK should be world-leading and the report highlights the capability that we already have in our existing oil and gas supply chain.

“If we embrace that then we can amplify those skills, build in areas we already have strength, recognise some of the bigger opportunities it starts to anchor real value in the UK economy.

“So the energy transition goes from being something we need to do from a climate change perspective to something that can also be a real driver of economic strength and the driver of high quality jobs up and down the country.

“We have got this great supply chain already, let’s use it.”